It’s been six years since we first wrote about the coming G-Zero world—a world with no global leader. The underlying shifts in the geopolitical environment have been clear: a US with less interest in assuming leadership responsibilities; US allies, particularly in Europe, that are weaker and looking to hedge bets on US intentions; and two frenemies, Russia and China, seeking to assert themselves as (limited) alternatives to the US—Russia primarily on the security front in its extended backyard, and China primarily on the economic front regionally, and, increasingly, globally.

These trends have accelerated with the populist revolt against “globalism”—first in the Middle East, then in Europe, and now in the US. Through 2016, you could see the G-Zero picking up speed on multiple fronts: the further deterioration of the transatlantic alliance with Brexit and the “no” vote on the Italy referendum; the end of America's Asia pivot with the collapse of the Trans-Pacific Partnership and the Philippine president announcing a break with the US; the Russian victory in Syria after backing President Bashar al Assad through nearly six years of war.

But with the shock election of Donald Trump as president of the US, the G-Zero world is now fully upon us. The triumph of “America first” as the primary driver of foreign policy in the world's only superpower marks a break with decades of US exceptionalism and belief in the indispensability of US leadership, however flawed and uneven. With it ends a 70-year geopolitical era of Pax Americana, one in which globalization and Americanization were tightly linked, and American hegemony in security, trade, and promotion of values provided guardrails for the global economy.

In 2017 we enter a period of geopolitical recession.

This year marks the most volatile political risk environment in the postwar period, at least as important to global markets as the economic recession of 2008. It needn't develop into a geopolitical depression that triggers major interstate military conflict and/or the breakdown of major central government institutions. But such an outcome is now thinkable, a tail risk from the weakening of international security and economic architecture and deepening mistrust among the world's most powerful governments.

And the recession starts with…

Risk 1: Independent America

Trump’s “America first” philosophy and his pledge to “make America great again” build on the most core of American values: independence. For Trump, that means independence from America's responsibility to play an indispensable role in world affairs, shaking off the burdens placed on the US by multilateral institutions and a range of allies. If there’s not an obvious, near-term benefit for the US, or if it’s the provision of a “public good” where others are free riding, it’s not something the US should be doing.

China’s scheduled leadership transition this fall will shape its political and economic trajectory for a decade or more. The scale of elite turnover before, during, and after the upcoming 19th Party Congress, combined with the divisive political environment that President Xi has fostered, will make this transition one of the most complex events since the beginning of China's reform era.

This year will bring another wave of political risks in Europe, and some of them will surely materialize. Disputes over Brexit will distract and deepen mistrust between the UK and Europe; French elections could lead to the far-right euroskeptic National Front taking power; the Greek crisis will continue to simmer without resolution; Turkey's slide toward authoritarianism will continue while the country's refugee deal with the EU could easily come apart; and large-scale terrorism remains a far greater risk than anywhere else in the developed world.

Leadership will also be lacking this year on other issues, as political officials in both developed and emerging economies avoid structural reform, undermining prospects for growth and new opportunities for investors.

Despite a veneer of effective autocracy, Middle Eastern governments have been weak for decades. Most of the region's borders were created by Europeans and were never fit for purpose. Legitimacy largely came from the outside, and then from energy money. The US and its allies ensured security. Today, all of those things are in short supply.

For the first time in decades, central banks face attack not just in emerging markets but in the US, the Eurozone, and the UK. Leaving aside the rationales that led to central bank independence in the first place, politicians have taken to blaming central bankers for political and economic woes of every sort. These attacks represent a risk to global markets in 2017 by threatening to upend central banks' roles as technocratic institutions that provide financial and economic stability.

Trump has signaled that he is willing to take on US corporations, a move that’s mostly about putting political points on the board by announcing better “deals” for the American people. Carrier, a maker of air conditioners, gets a tax break to keep a few hundred jobs in the country. Boeing and Lockheed Martin must sharpen their pencils to win government contracts. Ultimately, these are deals that are made to be signed. Corporate America and big banks are well represented on Trump’s cabinet and are ideologically aligned with much of the policy he wants to pass. Trump will surely go after some high-profile organizations that he, for whatever reason, has a personal gripe with, and many of those companies will take a tumble. But that’s a problem only for individual firms, not a structural issue.

Last July’s failed coup has introduced greater political uncertainty and economic volatility in Turkey, as Erdogan continues to use the ongoing state of emergency to seize control of day-to-day affairs and tighten his hold on the judiciary, bureaucracy, media, and even business sector through waves of arrests and purges. Erdogan is now looking to legitimize his de facto expansion of powers, and with the help of the opposition Nationalist Movement Party (MHP), Turkey is likely to hold a referendum on that question this spring. Unlike other referenda on the continent, the vote should be a win for the increasingly authoritarian president. Erdogan's drive to centralize powers will exacerbate many of the existing pressures on Turkey's domestic governance, economy, and foreign relations.

2017 will be a big year for North Korea. That's not a good thing. The North Koreans have substantially advanced their nuclear and missile programs and are set to expand them further. The hermit kingdom may have enough fissile material for some 20 nuclear weapons. It's getting closer to mastering warhead miniaturization technology, and thus possessing an intercontinental ballistic missile capability that could strike the West Coast of the US with a nuclear weapon. US policymakers consider this a red line (apparently the North Koreans hitting Alaska isn't particularly worrisome).

The political crisis pitting President Jacob Zuma against opponents within and beyond the ruling African National Congress (ANC) will worsen in 2017, putting the South African economy at greater risk and damaging regional stability. Having narrowly averted challenges to his leadership in 2016, Zuma will focus on domestic battles and dig in his heels this year, preventing reformers from taking needed steps to restore the country's economic stability. Internal ANC discord will weigh particularly on state-owned enterprise management. State-utility Eskom holds the largest share of government guarantees, and its balance sheet will loom over the sovereign rating for the medium to long term, particularly with a Zuma ally, Ben Ngubane, serving as chairman.

It’s been 19 years since we started Eurasia Group. How could we have known that “politics first” would not only describe our organization, but the world we live in?

It's a challenging time, and we've tried not to shy away from that in this report. But we also close on a note of hope. So many of the world's challenges remain unaddressed because they lack urgency. Politics hasn't been so relevant to our global marketplace in generations, but that's now a reality that is widely accepted and appreciated.

Most of the world's leaders understand that we're living through history right now. It's not a time to just sit back and analyze. It's a time for truth. That surely won't be comfortable. But we're completely committed to it, and to you.